Minutes 03/31/2014 - Laserfiche WebLink

Home Browse Search

March 31, 2014 o Redirecting the use of federal funding to invest more money in improving our neighborhoods o Reducing the City's Other Post-Employment Benefits (OPEB) liability • Continues the City's commitment to its Public Schools at an adequate funding level • Maintains City staffing levels necessary for departments to accomplish their missions • Continues the investment in critical infrastructure • Invests in civic organizations and the Arts • Promotes sustainability, livability, education, human capital, economic development and fiscal stability • Maintains the current real estate tax relief program for the elderly and disabled homeowners This overall budget proposal totals $619.2 million for Fiscal Year 2014-2015. This amount includes an estimate of the Schools' total budget and my recommended local funding level for the Schools. The size of the budget is indicative of the breadth, depth, and diversity of services, projects, and activities that the City undertakes for public safety, education, quality of life, economic development, infrastructure maintenance, and transportation. The two largest components of the budget are the General Fund and the Public Utility Fund. The proposed General Fund operating budget is $232.4 million, and the proposed Public Utility Operating Fund is $43.6 million. The General Fund, Public Utility, and Parking components of the proposed CIP Budget total $72.5 million. One can find a comprehensive list of the funds included in this budget on pages 3-9 through 3-11 of this budget document. Major Budget Challenges and Drivers In preparing this proposed budget, we had to overcome a number of very major hurdles: • The City's economy, like the State and National economy, is in a slow, fragile recovery from the unprecedented global recession that began in 2007. We derive 51 % of our General Fund revenue from property taxes, of which 76% comes from real estate taxes. Our assessed valuation of real property declined by four and a half percent from Fiscal Year 2010 to Fiscal Year 2011, increased by one percent in Fiscal Year 2012, and then dropped by four percent in Fiscal Year 2013. t has remained relatively flat ever since. As a result, we expect overall revenue growth to be flat compared to the Fiscal Year 2014 estimated total. • In addition to impacts caused by the recession, the recently implemented tolls at both the Downtown and Midtown tunnels will likely impact our local economy. The City commissioned Dr. James V. Koch, a professor of economics and President Emeritus at Old Dominion University, to prepare a study on the potential impact to Portsmouth from these tolls. Dr. Koch found that the negative burden of these tolls will affect Portsmouth over 8.48 times more than Virginia Beach, 6.1 times more than Norfolk, and 2.4 times more than Suffolk. Further, Portsmouth restaurants and businesses that have regional clienteles will bear the brunt of any decline in discretionary driving. In effect, the tolls will have the impact of a five to ten percent tax on the prices paid by their discretionary customers. While we do not have clear